DOCTORA L T H E S I S DOCTORA L T H E S I S
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Industrialised Timber Frame Housing
Managing customisation, change, and information
Max Bergström
Industrialised Timber Frame Housing
Managing customisation, change, and information
Max Bergström
Luleå University of Technology
Department of Civil and Environmental Engineering Division of Structural Engineering – Timber Structures
Preface
This thesis is the visible result of a research process, which for me has meant many interesting insights, increased knowledge, and lots of hard work. I hope that the product at least in part can match the process. Most important for me during this process has been the interaction with the many competent and inter- esting persons I have had the opportunity to meet. It would not have been possi- ble to accomplish this thesis without the support from these persons sharing their insights and knowledge. I am very grateful for this support and although not everyone can be mentioned I would especially like to thank:
Professor Lars Stehn, head of the Division of Structural Engineering – Timber Structures and initiator of the research project, for showing a real and genuine interest and knowledge in my research and for always providing good construc- tive ideas. I have really enjoyed all of our discussions, and chats, regarding differ- ent aspects of research and other matters.
Ass. Professor Mats Westerberg, Division of Management Control, for, during interesting discussions, sharing his knowledge of areas which I previously was not familiar with at all.
All of my colleagues at the Division of Structural Engineering – Timber Struc- tures, you have all made this journey interesting, pleasant, and enjoyable.
Without the companies, which have participated in the case studies and the sur- vey and provided valuable empirical data and industrial perspectives, performing this research would not have been possible.
This research has benefited from the valuable financial support, which is grate- fully acknowledged, from: The Norrbotten Association of Building Contractors, Lindbäcks Bygg AB, NUTEK, Handelsbanken Research Foundation, and from The Research Council of Norrbotten.
Jessica, meeting you is the best that has ever happened to me and you are always my greatest inspiration. Every day with you is a meaningful, exciting, and rich day full of beauty.
Göteborg, November 2004 Max Bergström
Abstract
The overall aim of this thesis is to develop an increased understanding of industri- alised timber frame housing (timber frame housing construction fully or partially conducted in a controlled environment utilising industrial processes and machin- ery). Of specific interest is how industrialised timber frame housing companies manage customisation, change, and information.
Three single case studies (at a medium-sized industrialised timber frame housing company), one multiple-case study, and one survey were conducted. The first single case study investigates how production can benefit from integrating a cus- tomer-oriented design and production. The second single case study illustrates the shift towards an enterprise resource planning (ERP) approach through a change process. The third single case study describes the ERP system implemen- tation. The multiple-case study investigates the prospects and pitfalls among four small and medium-sized industrialised timber frame housing companies that manufacture complex products utilising advanced prefabrication. The survey, conducted among the vast majority of industrialised timber frame housing com- panies in Sweden, presents the industry structure and investigates the benefits and disadvantages of ERP.
The results demonstrate that matching customer requirements and an industrial- ised building system is facilitated through product and process development.
Other findings suggest that ERP can meet the needs of industrialised timber frame housing, promote an organisation to be re-engineered through compre- hensive change, and act as a driver for a more efficient internal and external sup- ply chain. However, a lack of history regarding information technology (IT) sys- tems for production processes and the timing of the system selection in the over- all ERP adoption are both critical for the ERP system implementation outcome.
With no previous history of IT systems for production processes, an ERP system implementation is a big step even if it is carefully conducted. Industrialised timber frame housing has increased in popularity on the market over the last years. An important reason for this is the increased customer focus. However, blind cus- tomer focus leads to poor utilisation of resources. By balancing customer orienta- tion with internal efficiency, achieving an effective construction process seems possible. Communication between different actors in the construction process, finding a reasonable level of customer focus, and capacity limitations are current problem areas with the potential for improvement. Possible ways of improving the construction process are an increased integration between actors, a gradual increase in IT support, and finding the balance between project and process ori- entation. The survey demonstrates low ERP usage in industrialised timber frame housing with a low degree of strategic importance, while there are operational and managerial benefits. The results also show the potential of the ERP approach
for industrialised timber frame housing, while its use is favoured by an increased maturity in IT.
The overall results show that customer orientation, change, and information management are important ingredients in industrialised timber frame housing.
Customer orientation can act as a driver for change and for improved informa- tion management. Changes in business processes are needed to facilitate cus- tomisation and information management. Information management has a key role in the entire construction process to facilitate customisation, while the need of efficient information management can act as a driver for change.
Sammanfattning
Det övergripande syftet med denna avhandling är att utveckla en ökad förståelse för industrialiserat trähusbyggande (trähusbyggande som helt eller delvis utförs i kontrollerade produktionsmiljöer med hjälp av industrialiserade processer och maskinell utrustning). Av speciellt intresse är att undersöka hur industrialiserade trähusföretag hanterar kundanpassning, förändring och information.
Fyra fallstudier (genomförda vid små- och medelstora industrialiserade trähusfö- retag) och en kartläggning har genomförts. Den första fallstudien undersöker hur en kundanpassad utformning kan integreras med produktionssystemet. Den andra fallstudien beskriver förändring och integrering av affärsprocesser. Den tredje fall- studien beskriver införandet av ett affärssystem. Den fjärde fallstudien undersöker möjligheter och svårigheter vid fyra trähusföretag som tillverkar avancerade pro- dukter med hög grad av förtillverkning. I kartläggningen ingår majoriteten av industrialiserade trähusföretag i Sverige. Den redovisar industristrukturen samt för- och nackdelar med användandet av affärssystem.
Resultaten visar att en integrering av kundönskemål och det industrialiserade byggsystemet främjas av produkt- och processutveckling. Andra resultat visar att utveckling och integrering av affärsprocesser kan verka som drivkrafter för för- ändring och effektivisering av inre och yttre försörjningskedjor. Avsaknad av er- farenhet avseende informationsteknik (IT) samt svårigheter med att planera och genomföra införandet av IT-system kan dock verka som hinder för ytterligare förändring, utveckling och effektivisering av produktionssystem och försörjnings- kedjor. Industrialiserat trähusbyggande har en stark position på småhusmarkna- den. Marknadsandelarna för trähus i flera våningar är små men något ökande. En av anledningarna till detta (stark position respektive större marknadsandel) är den ökande kundfokuseringen. En för hög grad av kundanpassning har dock visats leda till dåligt resursutnyttjande. För att erhålla en effektiv industrialiserad bygg- process måste yttre (kundfokusering) och inre (produktionsprocesser) effektivitet balanseras. Kommunikationen i byggprocessen, identifiering av en rimlig nivå av kundorientering samt produktionsutrustning (anläggningar och maskiner) är nu- varande begränsningar med en identifierad utvecklingspotential. Möjliga sätt att förbättra byggprocessen är en ökad integrering konstruktion – produktion, grad- vis ökat IT-stöd och balansering av projekt- och processfokus. Kartläggningen redovisar låg grad av affärssystemsanvändning med en låg strategisk betydelse.
Operationella fördelar kan dock påvisas. Kartläggningen visar också att användan- de av affärssystem kan ha potential för industrialiserade trähusföretag vid ökad IT- mognad.
De övergripande resultaten visar att kundorientering, förändring och informa- tionshantering är viktiga ingredienser i ett industrialiserat trähusbyggande. Kund-
orientering kan verka som en drivkraft för förändring och förbättrad informa- tionshantering. Förändringar i affärsprocesser är nödvändiga för att underlätta kundanpassning och informationshantering. Informationshantering har en nyck- elroll i hela byggprocessen för att främja kundanpassning och behovet av effektiv informationshantering kan verka som en drivkraft för förändring.
Table of contents
1 Introduction 1
1.1 Background 1
1.1.1 Industrialised timber frame housing in Sweden 2
1.2 Research motives 3
1.3 Aim and central concepts 4
1.3.1 Central concepts 6
1.4 Limitations 6
1.5 Disposition and research questions 7
1.5.1 Appended papers 8
2 Research methods 11
2.1 Research strategy and choice of research methods 11 2.2 Analysis level and population of interest 12
2.2.1 Production systems and products 14
2.3 Case studies 16
2.4 Survey 17
2.5 Access to empirical data and role of researcher 18
3 Theory 21
3.1 Manufacturing and customisation 21
3.2 Housing construction and its industrialisation 22 3.3 Information management and information systems 24
3.4 Change 26
3.5 Implications 27
4 Results and discussion 31
4.1 Results and discussion, Paper I 31
4.2 Results and discussion, Paper II 32
4.3 Results and discussion, Paper III 33
4.4 Results and discussion, Paper IV 34
4.5 Results and discussion, Paper V 35
4.6 Concluding discussion 36
4.7 A methodological discussion 39
5 Conclusions 41
5.1 Scientific contribution 41
5.2 Practical implications 46
5.3 Further research 46
6 References 49
Appended papers
Paper I Stehn, L. and Bergström, M. (2002) Integrated design and production of multi-storey timber frame houses: production effects caused by customer- oriented design. International Journal of Production Economics, 77(3), 259-269.
Paper II Bergström, M. and Stehn, L. (2004) Matching industrialised timber frame housing needs and enterprise resource planning: a change process. Ac- cepted for publication in International Journal of Production Economics.
Paper III Bergström, M. and Stehn, L. (2004) Benefits and disadvantages of ERP in industrialised timber frame housing in Sweden. Submitted for publication in Construction Management and Economics.
Paper IV Bergström, M. and Westerberg, M. (2004) Customised industrialised timber frame house manufacturing: prospects and pitfalls. Submitted for publica- tion in Construction Innovation.
Paper V Bergström, M. (2004) ERP system implementation: a case study of a medium-sized industrialised housing company. Submitted for publication in In- ternational Journal of Operations & Production Management.
Appendix A – Mail questionnaire
Abbreviations in sections 1-5
CE Concurrent engineering ERP Enterprise resource planning IS Information system
IT Information technology
MRP Material requirements planning MRP II Manufacturing resource planning R&D Research and development ROA Return on assets
SCM Supply chain management
SME Small and medium-sized enterprise TOC Theory of constraints
QFD Quality function deployment
1 Introduction
This section presents the background comprising of an overview of the housing industry in Sweden, leading to: the scientific relevance and research motives, aim and some central concepts, limitations, disposition, and research questions of the thesis.
1.1 Background
An extensive governmental evaluation of the Swedish construction industry shows higher productivity in the manufacturing industry than the construction industry as well as the possibility to reduce production costs in housing construc- tion (SOU, 2000). To increase productivity and reduce costs, industrialisation, customer orientation, and a more efficient construction process are mentioned as important factors. A following governmental evaluation shows the Swedish con- struction industry as having a low degree of competition yielding high costs, low productivity and quality, and small incentives for change (SOU, 2002). For ex- ample, only a few companies are active on the market for multi-family dwellings.
A strategy to increase competition in Swedish housing construction, developed on behalf of the government, suggests increased use of timber in housing con- struction (Ds, 2004). According to the strategy, an increased knowledge of tim- ber housing construction among housing construction actors, more developed building systems for multi-storey (> 2 storeys) houses, and one-family house manufacturers acting as catalysts for increased industrialisation in housing are ways towards the overall goal. A comparison shows the efficiency development for the construction of one-family houses to be better than for multi-family dwellings, due to the higher degree of process-orientation in one-family housing construc- tion and the advantages arising from industrialisation (SOU, 2000). A further analysis of Swedish timber frame house manufacturing, conducted on behalf of a governmental department, also suggests that industrialised timber frame housing systems have the potential to reduce costs in housing construction (VA, 2004).
The cost of timber material does not make the most significant contribution to potential cost savings; rather, the main reasons for the cost reducing potential are, e.g. possibilities to increase prefabrication, improve logistics, and improve the construction process. Hence, the importance of developing market-oriented pre- fabricated building systems for multi-family dwellings in multi-storey houses to possibly utilise similar advantages as in one-family housing is pointed out in both Ds (2004) and VA (2004).
Both opportunities and obstacles are identified in recent Swedish development projects regarding construction industry and implementation and use of informa- tion technology (IT). Examples of opportunities are possibilities for improved communication, working methods, and decisions. Lack of standardised classifica- tion systems, difficulties of integrating IT systems throughout the construction
process, inadequate forms of contracts, and lack of knowledge are identified as current obstacles (Wikforss, 2003).
The manufacturing industry has gained substantial improvements in efficiency through concepts like supply chain management (SCM), lean and agile produc- tion, and comprehensive planning methods. These concepts and methods are of- ten supported by information systems (IS). Logistics, SCM, and lean and agile production are demonstrated as disciplines with the potential to also increase effi- ciency and flexibility in the housing construction process (Naim and Barlow, 2003; Roy et al., 2003). Methodologies provided by SCM, e.g. for control, can resolve many construction supply chain problems (Vrijhoef and Koskela, 2000).
Through case study research of a Swedish low-cost housing concept, it is shown that adopting an SCM philosophy in housing has the potential to, e.g. develop new markets and increase revenues (Olsson, 2000). Two obstacles for SCM adoption in the housing industry are the project focus and project culture (Ols- son, 2000), i.e. adaptation is needed due to the differences regarding these obsta- cles (Riley and Clare-Brown, 2001). Typically, the project-focus, i.e. the pro- duction of one single new product utilising temporary supply chains with separa- tion between design and production, negatively impacts construction supply chain management, thereby leading to instability and fragmentation (Vrijhoef and Koskela, 2000).
Industrialised housing (tentatively described in section 1.3 and positioned in sec- tion 2.2) both resembles and differs from the manufacturing industry, implicating both possibilities and limitations in the potential transfer of concepts from manu- facturing to housing and that real lessons can be drawn from the manufacturing industry (Gann, 1996; Gibb, 2001).
1.1.1 Industrialised timber frame housing in Sweden
The construction of timber frame houses has a long tradition in Sweden. Most one-family detached houses in Sweden have timber frames (lightweight frames) and are prefabricated by industrialised housing companies (approximately 74%
from 1990 to 2002). Of predominance are the build-operate/own-transfer forms of contract including the responsibilities to fulfil performance requirements. The companies own and perform design and production processes (factory and on- site) as well as possess factory buildings including industrial machinery. The total annual production value of Swedish industrialised timber frame housing is ap- proximately €730 M, with the annual export value at approximately €140 M (from 1999 to 2003). The major export markets are Denmark, Finland, Norway,
compared to the total production of timber houses and multi-storey houses in Sweden. On-site built houses with steel and concrete frames built by a few large contractor companies dominate the market for multi-storey houses. Industrialised timber frame housing companies manufacturing one-family detached houses and multi-family houses up to two storeys have not yet shifted focus very much to- wards multi-storey houses. Experiences from the one-family house market indi- cate that an industrialised production approach could also have potential for multi-storey timber frame houses.
1.2 Research motives
The construction industry is made up of multiple parts and can be defined in sev- eral ways. Within the scope of this thesis industrialised timber frame housing is regarded as a subgroup of industrialised housing, which is a subgroup of the housing industry, which is a subgroup of the construction industry (see also sec- tion 2.2 and Figure 2.2). Is industrialised timber frame housing an interesting and relevant area for research? Based on the demonstrated difficulties and opportuni- ties in housing construction it is here argued that it is:
• In Sweden, the construction industry represents roughly 10% of the labour market and the built environment is of great importance for the welfare for society. Ideally, buildings should be functionally, economically, sociologically, environmentally, and aesthetically acceptable and attractive for long periods of time (SOU, 2002). The state of the art of housing construction (section 1.1), its development potential (section 1.1), and its importance for society makes empirical data collection and research findings within housing construction scientifically relevant, with the potential for practical implications.
• By definition, industrialised timber frame housing is industrialised and per- forms parts of or the entire construction process utilising industrialised proc- esses and machinery. Research findings are thus based on an area within housing construction with a history of industrialisation. Experiences from the detached housing market in Sweden, which has had open competition for a long time, demonstrate that an industrialised timber frame production ap- proach is highly competitive. Hence, industrialised timber frame housing is a source of empirical data collection that when analysed can contribute with scientifically relevant findings.
• Similarities to the manufacturing industry make industrialised timber frame housing interesting for research, because of the learning aspects regarding util- ised concepts within the manufacturing industry.
• An increased knowledge of industrialised timber frame housing is relevant for current and potential actors on the multi-storey housing market, primarily re- garding alternative production methods (increased industrialisation).
1.3 Aim and central concepts
Sections 1.1 and 1.2 imply that improvements in housing construction are possi- ble and that there is a learning potential from manufacturing to housing con- struction as well as from industrialised one-family house manufacturers to indus- trialised multi-family and multi-storey house manufacturers.
Possible improvements in housing suggest that there is a potential for an applied or normative research approach, i.e. identify “solutions” or ways to possible
“solutions” of existing problems within housing (described in section 1.1). The learning potential also suggests a potential for a more theoretical or descriptive research approach, i.e. increase the existing knowledge base regarding industrial- ised timber frame housing.
The origin of this thesis is the need for improvements in housing construction.
However, it is not within the scope of a thesis to only provide directly applicable
“quick-fix solutions” to existing problems. Instead, it is to increase knowledge of a scientifically relevant area (section 1.2). The research presented in this thesis has an applied research orientation due to the practical origin of the thesis and the interest of the researcher, see also section 2; and while in the search for new knowledge, practical implications have emerged due to this orientation. The re- search findings might thus be used for increased, developed, and normative in- sights, also for non-scientific target groups, of a previously uncharted area such as industrialised timber frame housing. Both the research findings and their implica- tions can thus be used at scientific and practical levels, Figure 1.1.
Figure 1.1. Relations between empirical data collection and research contributions.
Hence, the overall aim of the thesis is twofold – one scientific and one practical oriented aim:
• The overall scientific aim is to develop an increased understanding of in- dustrialised timber frame housing and how industrialised timber frame housing companies are aiming for construction process and supply chain improve- ments.
sible ways towards “problem solutions” more closely and directly related to industry needs.
To increase existing knowledge regarding industrialised timber frame housing, a multi-scientific research approach has been applied. By doing so, several ingredi- ents of industrialised timber frame housing have been covered rather than focus- ing on separate and isolated ingredients. A concept such as industrialised timber frame housing can be multi-definitional, covering multiple aspects. Tentatively and schematically, the complexity of industrialised timber frame housing can be illustrated as in Figure 1.2, where possible ingredients influencing and defining industrialised timber frame housing are shown. The ingredients shown in Figure 1.2 represent broad terms, for example “information” can include e.g. informa- tion management, IS, and IT. Each ingredient, along with other ingredients not included in Figure 1.2, might be of great importance for describing industrialised timber frame housing. It is neither the intention, nor within the scope of this thesis to provide a complete and definitive description and definition of industri- alised timber frame housing. Selected ingredients are instead described and ana- lysed in an industrialised timber frame housing context. Selecting ingredients has been an iterative process where a mix of pre-understanding, research findings, industrial needs, and interests of the researcher have contributed to the gradual emerging choices of ingredients. The motive for selecting the specific ingredients mentioned below, is the increasing awareness during the research process that they are central parts of industrialised timber frame housing. Hence, describing these ingredients and their relations to each other as well as to industrialised tim- ber frame housing can contribute in reaching the aim. The research process is further described in section 2.1.
Figure 1.2. Industrialised timber frame housing: tentative ingredients.
Ingredients of specific interest are customisation, information management including adoption of IS and IT support, and change. Brief initial explanations of some ad- ditional central concepts in the thesis, i.e. “timber frame houses”, “construction
process”, “supply chain”, “information management”, and “IS”, are provided in section 1.3.1 to further understand this and forthcoming sections. These con- cepts, along with customisation and change, are further developed in an industri- alised timber frame housing context in this and forthcoming sections and ap- pended papers.
1.3.1 Central concepts
Timber frame houses are houses with load-bearing structural lightweight or solid wood frames. Log houses and log cabins are here not included in the term timber frame houses. Construction process is the life-cycle a product such as a house un- dergoes, as all products produced by discrete assembly industries: concept – de- sign – planning and controlling – manufacturing – assembly (Winch, 2003). Not included in the term construction process are the parts of a product’s life-cycle following assembly (maintenance and demolition). This description provided by Winch (2003) matches the needs of the thesis, where the planning and control- ling phases of the construction process along with manufacturing, assembly, and design are the most important, while concept is covered only briefly. A supply chain can be viewed as a network, supported by processes, organisational struc- tures, and technologies, consisting of suppliers, manufacturers, distributors, retail- ers, and customers, supporting material, information, and financial flows (Akker- mans et al., 2003). Information management in an organisation comprises the gathering, storing, analysing, communicating, and using of information, prefera- bly in a timely and intelligent manner (Feldman and March, 1981). IS are IT based software systems used to support, e.g. business management and production related business processes such as materials management and production control.
A typical example of IS is enterprise resource planning (ERP) systems used for enterprise business integration.
1.4 Limitations
The empirical data collection was conducted only among industrialised timber frame housing companies in Sweden from 1999 to 2004. The focus of the re- search has been how industrialised timber frame housing companies, mainly small and medium-sized enterprises (SMEs), are aiming for construction process and supply chain improvements on an organisational level. The research is not con- ducted and analysed from an SME perspective, but instead refers to the compa- nies as SMEs since the term carries important information regarding the industry and its companies. Influencing external and internal factors, except those men- tioned as the focus of this research, of these companies have not been analysed, such as political interventions or the working environment of an individual con-
(QFD), concurrent engineering (CE), and theory of constraints (TOC) have been used as means to describe industrialised timber frame housing and how in- dustrialised timber frame housing companies are aiming for construction process and supply chain improvements. These methods have also been used as a system- atic way of collecting empirical quantitative and qualitative data.
1.5 Disposition and research questions
This compound thesis consists of two main parts, I and II. Part I comprises sec- tions 1-6, preceding Part II, which contains appended papers briefly described in section 1.5.1. The backbone of the thesis is the papers, which contain all empiri- cal findings. Each main phase of the research process, represented by one paper, is consequently based on the preceding main phases. In each paper, the aims and sometimes research questions are articulated. Each paper is one step towards reaching the overall aim to develop an increased understanding of industrialised timber frame housing. Each paper represents a description of industrialised timber frame housing, focusing on the selected ingredients described in section 1.3.
Based on the aim of each paper, the research questions to be answered in this thesis can, in a condensed form, be articulated as:
• How can industrialised timber frame housing production benefit from an in- tegration of a customer-oriented design and production? (Paper I)
• Can industrialised timber frame housing needs and ERP match? (Paper II)
• What are the benefits and disadvantages of ERP as applied to industrialised timber frame housing in Sweden? (Paper III)
• How are front-runners in industrialised timber frame housing in Sweden ad- dressing prospects and pitfalls? (Paper IV)
• How are specific characteristics pertaining to a medium-sized industrialised timber frame housing company impacting ERP system implementation? (Pa- per V)
Each paper can, of course, be read and understood separately and so can Part I.
However, to present the findings as a thesis, both Parts I and II are needed. Part I is needed to connect and integrate the papers and position the overall findings scientifically and practically. Most importantly, the sections “Method”, “Results and discussion”, and “Conclusions” describe identified cross paper relations. The main purpose of each section in part I is to link the papers in the following per- spectives:
• Demonstrate the need of research regarding industrialised timber frame hous- ing, section “Introduction”
• Illustrate the overall research strategy and describe the chosen research meth- ods, section “Research methods”
• Describe and, regarding some areas, develop the theoretical framework in the papers, section “Theory”
• Summarise the results from the papers, discuss the results of each paper, and discuss the cross paper findings and the research process, section “Results and discussion”
• Based on the appended papers and preceding sections in Part I present the overall conclusions of the thesis, practical implications, and outlines for further research, section “Conclusions”
1.5.1 Appended papers
Paper I Integrated design and production of multi-storey timber frame houses:
production effects caused by customer oriented design by Lars Stehn and Max Bergström was published in International Journal of Production Economics (El- sevier) 2002. Max Bergström’s contribution to the paper was planning, perform- ing, and evaluating the second main part of the data collection as well as partici- pating in writing the manuscript for the paper. In this paper, a medium-sized in- dustrialised timber frame housing company was investigated from the viewpoint of customer orientation, production, and design of multi-storey timber frame houses.
Paper II Matching industrialised timber frame housing needs and enterprise re- source planning: a change process by Max Bergström and Lars Stehn is accepted for publication in International Journal of Production Economics (Elsevier) dur- ing 2004. Max Bergström’s contribution to the paper was planning, performing, and evaluating three of the four single case studies. Both authors wrote the manuscript for the paper. In this paper, the change process of a medium-sized industrialised timber frame housing company is described and analysed.
Paper III Benefits and disadvantages of ERP in industrialised timber frame hous- ing in Sweden by Max Bergström and Lars Stehn was submitted for publication in Construction Management and Economics (Spon Press) in May 2004. After being reviewed, the paper was revised and resubmitted in September 2004. Max Bergström’s contribution to the paper was planning, designing, administrating, and evaluating the survey. Both authors wrote the manuscript for the paper. In this paper, a survey of industrialised timber frame housing companies in Sweden is presented.
Paper IV Customised industrialised timber frame house manufacturing: prospects
companies, manufacturing complex products utilising advanced prefabrication, are described and analysed.
Paper V ERP system implementation: a case study of a medium-sized industrial- ised housing company by Max Bergström was submitted for publication in Inter- national Journal of Production & Operations Management (Emerald) in August 2004, and has passed the initial screening and is currently under review. In this paper, ERP system implementation of a medium-sized industrialised timber frame housing company is described and analysed.
2 Research methods
This section describes the research strategy, its implications on the choice of re- search methods, population of interest, examples of production systems and products, how the research has been conducted, and the role of the researcher.
2.1 Research strategy and choice of research methods
Along with the need for improvements in housing construction, the origin of the thesis is the author’s pre-understanding and interest of industrialised timber frame housing. A licentiate thesis by Bergström (2001) represents the scientific pre- understanding of the author. In Bergström (2001) results from a research and de- velopment (R&D) project (VR, 2001), aiming for an industrialised development of a customised multi-storey timber frame house system, are reported along with findings from other research regarding production process developments in in- dustrialised timber frame housing. The research has been conducted in an indus- trialised timber frame housing research environment. For example, supplier – contractor relations (Fredriksson, 2003), and modularization for buildability (Björnfot, 2004) have been investigated.
The aim and research questions determine the research method. For each paper the specific aim has resulted in choosing an appropriate research method to reach the aim. Each paper is consequently based on the preceding papers. Paper I rep- resents the starting point for the thesis, where research findings from the R&D project (Bergström, 2001; VR, 2001) are reported. The following papers are in- fluenced by the findings in Paper I. Paper II follows up and expands the findings from Paper I. The survey in Paper III was conducted to broaden the knowledge base established in Papers I and II. The findings in Paper III prompted Paper IV, since a follow-up, e.g. in the form of a multiple-case study, of selected surveyed companies would provide valuable, additional knowledge. The case study pre- sented in Paper V is prompted mainly by Papers I and II, but also by the oppor- tunity to uncover supporting or non-supporting findings related to Papers III and IV. The research process is summarised in Table 2.1 and illustrated in Figure 2.1.
Table 2.1. Characteristics for each main phase in the research process.
Paper I Paper II Paper III Paper IV Paper V Time period
for data collection
1999-2000 1999-2002 2002-2003 2003-2004 2003-2004
Method for data collection
Case study Case studies Survey Multiple- case study
Case study Qualitative or
quantitative focus
Both Qualitative Both Qualitative with quantitative
elements
Qualitative
No. of observed companies
1 1 48 4 1
Figure 2.1. Research process.
The research strategy has led to different research methods (single/multiple case studies and a survey), different methods for data collection (interviews, observa- tions, archival records and documents, and a questionnaire), and collection of both qualitative and quantitative data. Interviews and parts of the survey are ex- amples of qualitative data, with production costs and financial performance meas- ures being examples of quantitative data. As stated earlier, the aim and research questions determine the research method. Since the overall aim of the thesis is to develop an increased understanding of industrialised timber frame housing and how industrialised timber frame housing companies are aiming for construction process and supply chain improvements, the combination of qualitative and quantitative methods has been the pervading approach. By using a multi- methodological approach different phenomena can be addressed, while the dif- ferent methods can be used to support each other and provide a solid foundation for creating new knowledge (Beach et al., 2001).
Due to an increased knowledge of the research area and the research process, the researcher’s pre-understanding has evolved during the research process. During the research process, the research questions, section 1.5, have gradually emerged as a result of the research findings along with the changed pre-understanding.
Hence, the choices of appropriate research methods have also emerged during the research process. The overall research strategy is thus a consequence of the emerging research questions, the progressively increasing pre-understanding re- garding theoretical areas and research processes, and the research findings based on the empirical data collection and empirical data analyses.
2.2 Analysis level and population of interest
Figure 2.2 illustrates the relations between the entire construction industry (A)
alised housing (C1) and traditional on-site construction (C2), according to the initial definitions in section 1.3.1. Industrialised housing is here further catego- rised into three main categories, depending on the material in the structural frame (timber, steel (D2), or concrete (D3)). Of course, alternative categorisations are possible, such as categorising the housing industry according to product type or company size, or categorising industrialised housing according to the degree of prefabrication. The categorisations in Figure 2.2 are not entirely rigid; crossing over between different categories is possible. For example, it is possible that an industrialised housing company or a network of companies manufacture timber and steel frame houses. Here, a company is categorised as a timber house manu- facturing company if at least 75% of its production volume is timber frame houses. For the case studies, the analysis level is the individual company, while for the survey the individual company and industry (and subgroups of industry) represent the analysis level.
Figure 2.2. Population of interest (D1) and analysis levels (D1, E).
The total population of interest in this study is all industrialised timber frame housing SMEs and large enterprises (according to the European Communities definition for company size classification, Table 2.2) manufacturing products like garages, one/multi-family dwellings, schools, offices etc., in Sweden. Table 2.2 illustrates and quantifies the different company size categorises for informational purposes. Manufacturers of log houses and log cabins are excluded from the population of interest. Micro enterprises are also excluded for two reasons; they are considered too small (often one, two, or three employees) to utilise a suffi- ciently high degree of industrialisation, and the population of interest increases significantly if micro enterprises are included. Hence, including micro enterprises in the population of interest would only increase the amount of work needed to administer the data collection without contributing any interesting and relevant knowledge. The total population of interest was included in the survey presented in paper III, where more details are found. Section 2.4 provides further details regarding the survey. In papers I, II, IV, and V, selected subgroups from the total population of interest are used for data collection. In the following, the term
“industry” refers to the described total population of interest.
Table 2.2. Company size classification with respect to annual turnover.
Category Micro Small Medium-sized Large Turnover ≤ €2 M ≤ €10 M ≤ €50 M > €50 M
2.2.1 Production systems and products
Industrialised timber frame housing production includes factory and on-site pro- duction. Factory production can comprise manufacturing of building elements, i.e. walls, floors, and inner roofs or volume elements. Volume element manufac- turing is the manufacturing of building elements, Figure 2.3a, assembly of build- ing elements to three-dimensional volume elements, Figure 2.3b, volume ele- ment completion (plumbing, electrical and ventilation work, surfaces finishing, fixed equipment, etc.), Figures 2.3c-e, and preparation for transport to construc- tion site, Figure 2.3f.
a) b) c)
d) e) f)
the factory they are transported to the site, assembled, Figure 2.4b, and plumbing and electrical work etc. are connected.
a) b)
Figure 2.4. Assembly of: a) building elements and b) volume elements.
As described in section 1.1.1, one-family houses and multi-storey houses com- prising such as dwellings, Figure 2.5a, are products manufactured by industrialised timber frame housing companies. Examples of other products are ga- rages/storehouses, Figure 2.5b, and dwellings in two-storey houses, Figure 2.5c.
a) b) c)
Figure 2.5. Products manufactured by industrialised timber frame housing compa- nies: a) four-storey house comprising dwellings, b) bicycle storage, and c) two- storey house comprising dwellings.
Additions to existing houses using, e.g. volume elements, is one method of in- creasing popularity and increase the number of dwellings in cities, Figure 2.8.
Figure 2.8. Addition on existing concrete house using prefabricated volume ele- ments.
2.3 Case studies
Applying a case study research method is appropriate when the research problem requires an understanding of complex phenomena, e.g. influencing an entire or- ganisation, and is not controllable by the researcher (Meredith, 1998). One im- portant rationale for conducting a single case study is when the case is unique and provides findings otherwise hard to find. Multiple-case studies are often consid- ered as providing compelling and robust evidence (Yin, 2003). Case studies can be used for theory building by using empirical findings, e.g. within a limited set of companies (Wacker, 1998). Both qualitative and quantitative data collection are appropriate methods for case study research (Beach et al., 2001; Yin 2003).
Case studies are used here to understand multifaceted phenomena, briefly de- scribed below and in detail in each appended paper, to increase knowledge of industrialised timber frame housing, as articulated in the aim.
Different case study designs, utilising different data collection methods, have been applied. The research in Papers I, II, and V was conducted using single case study research at one company with unique characteristics. The company is a medium- sized industrialised timber frame housing company utilising advanced prefabrica- tion manufacturing of complex products. The company is further described in each of the above mentioned papers. A one-year single case study was performed in Paper I. In Paper II four single case studies were successively performed over three years. In Paper V, a one-year single case study was conducted. Paper IV presents a multiple-case study performed at four companies where data collection was conducted during one day at each company. The case studies thus represent
In Paper I, the integration of customer-oriented design and production of multi- storey timber frame houses was studied. Data collection was conducted in two main parts. First, direct observations of a product development and design process applying methods for incorporating and integrating requirements from customers, i.e. tenants, into the design process. Second, direct observations of production of a three-storey house with customised flats (individually designed) and a multi- storey standard system house to investigate possible disturbances and cost effects from alternative design solutions.
In Paper II a change process illustrating the shift towards an ERP approach was described. Four, single case studies, the first study as in Paper I and included in Paper II to explain the whole change process, were successively performed. Data collection was performed in four main parts. First, this part coincides with data collection for Paper I, described above. Second, direct observations and analysis of a formulation of the internal change drivers performed by all of the case com- pany’s employees. Interviews with managers from the whole business process and several floor workers, together with direct observations of the current production process, were also carried out for data collection. Third, interviews with produc- tion management and direct observations of production during a project with a high degree of customer choices. Fourth, interviews and participant observations were carried out during a development project regarding a possible ERP system implementation.
In Paper IV a multiple-case study is used to understand the current prospects and pitfalls within four industrialised timber frame housing companies (SMEs). Case companies were identified and selected among the surveyed companies in Paper III due to their advanced prefabrication of complex products. Data collection was conducted through interviews with production management and production staff and direct observations of the companies’ production systems and production processes (in the factories). Archival records are used for data collection regarding the companies’ financial performances, indicated through return on assets (ROA) and turnovers.
ERP system implementation was studied in Paper V. Data collection was con- ducted through interviews of implementers and top management and direct ob- servations during the implementation.
2.4 Survey
Surveys have been commonly used to research small business and entrepreneur- ship, and one important methodological issue is response rate (Dennis, 2003).
Enlarging the sample (not necessarily affecting the response rate) and attempting to minimise non-responses are two ways of avoiding generalisation from survey findings being questioned. According to Erdogan and Baker (2002) the latter so-
lution is preferred. The survey here is used to investigate the industry structure of the total population and if and how subgroups have different key-characteristics.
One survey has been conducted, presented in Paper III. The population of inter- est was the total population according to section 2.2. A questionnaire, Appendix A, consisting of fixed (concerning company characteristics) and open-ended (e.g.
applied to ERP impacts) questions was mailed to production managers during September 2002. The cost-effectiveness, self-administration, and confidentiality for the respondent are advantages that outweighed any possible disadvantages, such as potentially low response rates and misunderstandings. The fixed questions apply to customisation, main product, production method, company size, and ERP approach. The open-ended questions apply to experiences and attitudes re- garding ERP use. The questionnaire was designed to promote a high response rate since establishing the industry structure as correctly as possible was regarded as an important factor to increase reliability and the possibilities for generalisation.
Biases due to non-responses might disrupt any possibilities to generalise the sur- vey findings (Erdogan and Baker, 2002). Hence, the questionnaire was short, easy to complete, and preceded by a telephone call informing of the aim of the study.
Pre-addressed, postage-paid response envelopes and a signed cover letter were included with the questionnaire. To the respondents that did not return the questionnaire, a follow-up telephone call was made and a second copy of the questionnaire was sent if necessary. Summary results were distributed to the par- ticipating companies. Besides the questionnaire the survey included the compa- nies’ financial performance (indicated by ROA), where archival records were used for data collection. The questionnaire provided a snapshot of the examined variables as per September 2002. However, archival records along with the ques- tionnaire design also gave insight regarding the companies’ past.
2.5 Access to empirical data and role of researcher
The case company in Paper I is the same as in Papers II and V. The company was also included in the survey in Paper III and the multiple-case study in Paper IV.
This is because (1) the company participated in the R&D project mentioned in section 2.1 and Figure 2.1, (2) the company participated in and partly financed the research presented in Bergström (2001), and (3) the company has a history (change processes prior 1999), the characteristics (product mix, production method, and IS approach), and driving forces for development, making it inter- esting for empirical data collection. Hence, access to empirical data along with company characteristics and previous and on-going change processes have been a base for conducting unique single case studies. The role of the researcher when
probably focus on different areas or collect different empirical data if given the same basic conditions for conducting a case study. Furthermore, different re- searchers would also probably interpret the exact same case study data differently.
This means that it is not the intention within the frame of this thesis to present an objective and “true” model of reality, made independently of the researcher’s pre-understanding and values, based on the case studied phenomena. Rather, the intention is to increase knowledge of the case studied phenomena through inter- action with the research context.
The role of the researcher is somewhat different when conducting a survey com- pared to case study research. When the questionnaire is designed, sent out, and returned the empirical data is “fixed”. However, interpreting the collected data, as well as the questionnaire design, might differ between different researchers.
3 Theory
This section presents the overall theoretical framework of the thesis, representing theories selected to match the aim. The framework covers the following areas:
manufacturing concepts and supply chain management, housing construction and its industrialisation, information management and information systems, and change. Finally, the implications of the theoretical framework for industrialised housing are presented.
3.1 Manufacturing and customisation
The eras of manufacturing have changed from craft and mass production to lean production, mass customisation, and agile production (Brown and Bessant, 2003).
The manufacturing concepts superseding craft production have all aimed for im- proved performance regarding responsiveness to changing market conditions.
These concepts have commonalties as well as differences and are appropriate for different business environments (Sahin, 2000). The primary goals of the lean pro- duction concept are increased product quality and reduced costs (Yusuf and Adeleye, 2002). To attain these goals, lean production stresses the critical impor- tance of improving the two main conversion processes (design and production) and eliminating waste (Crowley, 1998). The customisation approach of lean pro- duction is to manufacture large varieties of high volume products rather than manufacturing individually designed products in any quantity as in the agile con- cept (Yusuf and Adeleye, 2002). The agile concept includes the core elements of lean production, but is extended to include the key features responsiveness to unplanned changes, flexibility, and availability (Aitken at al., 2002). Mass cus- tomisation can be regarded as the link between leanness and agility, i.e. under- lining the importance of efficient processes and flexibility to respond to planned changes (Sahin, 2000). Common features among the concepts are, for example, continuous improvements, integration of design and production, and simple but flexible production equipment. The mass customisation and agile concepts use IT support to a higher degree than the lean concept, since it enables customisation as well as acts as a driver for organisational change towards agility (Sahin, 2000).
SCM and the supply chain can be viewed and defined in several ways. Generally SCM is associated with the management of the distribution of products from raw material through manufacturing processes to point of sale for the end product.
The supply chain is by Lummus and Vokurka (1999) defined as “all the activities involved in delivering a product from raw material through to the customer in- cluding sourcing raw materials and parts, manufacturing and assembly, ware- housing and inventory tracking, order entry and order management, distribution across all channels, delivery to the customer, and the information systems neces- sary to monitor all of these activities”. SCM “co-ordinates and integrates all of these activities into a seamless process” (Lummus and Vokurka, 1999). According to Krajewski and Ritzman (1999) SCM has a strategic significance since com-
petitive advantages can be achieved from the management of the supply system.
Materials management, which includes purchasing materials and services, inven- tories, production levels, staffing patterns, schedules, and distribution, has an im- portant role in the SCM and it affects the entire organisation (Krajewski and Ritzman, 1999). A supply chain can also be viewed as a network, supported by processes, organisational structures, and technologies, consisting of suppliers, manufacturers, distributors, retailers, and customers, supporting material, infor- mation, and financial flows (Akkermans et al., 2003). Supply chains have two main functions: the physical function of transformation, storage, and transporta- tion, and the market mediation function of matching supply and demand (Ak- kermans et al., 2003). The perspective of materials management has since the mid-1980s been moved from a tactical low level task to a strategic management concept that supports customer focus and creates competitive advantage (London and Kenley, 2001). Ho et al. (2002) have identified several perspectives of view- ing and defining SCM ranging from “a set of decisions or activities of purchasing and supplier management” to “a management philosophy involving management and integration of selected key business processes across the supply chain” (i.e.
the process view). Challenges facing organisations are the importance of manag- ing the internal supply chain (e.g. manufacturing, logistics, purchasing) as well as the entire supply chain (Pagell, 2004).
Hence, SCM is a broad concept covering multiple aspects of an organisation’s internal and external activities and processes. Here, the SCM concept refers to the internal supply chain of industrialised timber frame housing companies as well as their external supply chain (e.g. customer and supplier relations). The SCM concept is critical here in understanding industrialised timber frame housing, since aspects of SCM, such as materials and information management and IS use are vital for managing the internal and external supply chain (Pagell, 2004). In- deed, effective integration of the major supply chain components, i.e. customers, manufacturing, and suppliers, is the key to an organisation’s long-term success (Tan et el., 1999). Manufacturing concepts and SCM relating to customisation of industrialised timber frame housing are further developed mainly in Papers II, III, and IV.
3.2 Housing construction and its industrialisation
The brief description of the construction process in section 1.3.1 is here devel- oped, as modified from Winch (2003), Figure 3.1:
• Concept: definition of functionality of the product related to market demands
• Manufacturing: components and subassemblies are transformed from raw ma- terials into their final form
• Assembly: the components are assembled to create the finished product
Figure 3.1. Outline of typical construction process.
Housing construction is a project-based form for designing and manufacturing unique products (houses). Although many projects involve similar process stages, each project is regarded as unique since it creates a prototype, as well as at a new site with its unique prerequisites (Wegelius-Lehtonen, 2001). Due to housing construction’s one-off nature, temporary production systems and supply chains are utilised, leading to low productivity development and inadequate approaches to control the construction supply chain (Vrijhoef and Koskela, 2000). Further- more, transfer of concepts such as lean production from manufacturing to con- struction is difficult due to the different context of construction in comparison with manufacturing (Koskela and Vrijhoef, 2001).
To overcome some of the difficulties regarding traditional crafts-based on-site housing and improve the housing construction process, industrialisation of hous- ing inspired by the possibilities of applying mass production to housing construc- tion has emerged (Winch, 2003). This early industrialisation of housing was initi- ated during the first half of the 20th century and influenced the evolution of sys- tems building (Gann, 1996). Standardisation of products (a prerequisite for pre- fabrication), prefabrication, and new methods to control quality and production were elements in the systems building approach (used mainly in the 1960s in countries like Sweden and Great Britain). This approach was production-focused, non-customer oriented, and did not result in increased overall productivity or reduced costs or construction times compared to traditional housing construction (Gann, 1996). Generally, the industrialisation of housing in the form of systems building is seen as a failure for a variety of reasons (Winch, 2003), including:
• Dysfunctional quarters of cities due to poor urban planning
• Quality problems due to poor design and lack of management control
• Poor maintenance of completed houses
Not all of these problems can be related to industrialisation itself, but direct and associated failures of industrialisation of housing and systems building led to a re- turn to traditional housing during the 1970s (Winch, 2003).
Since then industrialised housing has evolved through customer orientation and construction process developments. Japanese industrialised housing companies have successfully adopted and adapted the lean production concept through bal- ancing customisation and standardisation, while developing efficient production processes (Gann, 1996). Standardisation of processes and products can improve the construction process, while prefabrication is shown to improve safety, pro- ductivity, and quality; customisation is efficiently achieved by combining stan- dardisation and prefabrication (Gibb, 2001). A re-engineered construction proc- ess through new technology (e.g. prefabrication) combined with changes in products and processes is needed to achieve efficient mass customisation in hous- ing (Roy et al., 2003). Industrialised housing both resembles and differs from the manufacturing industry, meaning that there are limitations, though not to be over-emphasised, in the potential transfer of concepts from manufacturing to housing (Gann, 1996). Real lessons can be drawn from the manufacturing indus- try (Gibb, 2001), e.g.:
• It is possible to replace mass production with mass customisation through im- proved technology
• The need for customisation, including the offer of choice, must be recognised
• The supply chain must be acknowledged and managed
• Prefabrication is useful, if subservient to the delivery of the end product 3.3 Information management and information systems
Ideally, the information management of organisations is driven by the desire to improve decisions and eventually increase competitiveness. Managing informa- tion is a key activity for competitive organisations and it has been long known that to be successful, organisations have to balance information need with infor- mation processing capacity (Galbraith, 1972). Still, information management is complex and leads to irrationalities such as collecting too much information or using collected information improperly (Feldman and March, 1981). To change information processing capability an organisation can either reduce the need for information processing or increase information process capacity, as described in Figure 3.2. The amount of uncertainty in Figure 3.2 is represented by the differ- ence between amount of information needed to be processed and the amount actually processed. The need for information processing, in an organisation, can be reduced by creating slack resources or self-contained units while implement- ing IS or creating new lateral relations are ways of increasing information proc- essing capacity (Galbraith, 1972). This is supported in Flynn and Flynn (1999), where strategies for coping with complexity as proposed by Galbraith (1972) are
Figure 3.2. Information processing model, modified from Macintosh (1994).
The importance of IT and IS to support formal planning and controlling of busi- ness processes is increasing (Irani, 2002). For manufacturing companies, IS such as manufacturing resource planning (MRP II) and ERP systems are often the natural choice for improving process performance and organisational competi- tiveness (Irani, 2002). Material requirements planning (MRP), MRP II, and ERP represent different steps in the development of methods for resource planning and controlling, incorporating an increasing number of business processes (Ol- hager and Selldin, 2003). MRP, MRP II, and ERP also represent the evolution of software tools for manufacturing companies designed to support and optimise business processes (mainly financial, manufacturing, and distribution) (Krajewski and Ritzman, 1999). Many SMEs in the manufacturing industry lack a history regarding the implementation and use of MRP and MRP II systems (Petroni 2002; Muscatello et al., 2003), exemplifying that SMEs generally have small fi- nancial and organisational resources for development (Ylinenpää, 1997). Materials and information management have important roles in the SCM and the devel- opment of resource planning methods has shifted focus from logistics and the in- ternal supply chain to an SCM focus. One industrial trend concerning ERP and SCM is the integration between supply chain capabilities and ERP systems, where the drivers are cross enterprise integration and supply chain effectiveness (Tarn et al., 2002). Further descriptions of MRP, MRP II, and ERP along with identified benefits and disadvantages are found in Papers II, III, and V.
Construction companies are often slow to adopt IS and IT applications and un- able to obtain potential benefits of investments in IT, furthermore much of the research regarding IT and construction have been conducted within the large construction companies (Stewart et al., 2002; Voordijk et al. 2003; Barthorpe et al., 2004). SME construction companies can achieve strategic benefits from IT support, though managerial and operational benefits are to date often realised more generally (Love et al., 2004). Applying a comprehensive IS approach, such as an ERP business integration approach, is presently more widely adopted in the manufacturing industry than the construction industry (Barthorpe et al., 2004).
ERP has the potential to improve effectiveness regarding the supply chain and financial management of large enterprises within construction (Barthorpe et al., 2004). However, according to Shi and Halpin (2003), ERP systems can hardly
meet the needs of the construction industry, since they are primarily developed for the manufacturing industry and do not address the nature and business culture of construction. By case studying a large construction company, Voordijk et al.
(2003) suggest that ERP can play a strategic role within the construction industry if primary processes are inter-organisationally standardised, business and IT strate- gies are matched, and the ability to use ERP for information management is high. The construction industry and IS are further developed in Papers II, III, and V.
IS implementation is a critical stage and a major obstacle that can require consid- erable cost and time. Failed implementation might cause major problems such as order-processing difficulties, operating losses, or reduced operation earnings (Motwani et al., 2002), while a successful implementation can produce re- engineered and improved enterprises (Al-Mashari, 2002). Since IS implementa- tion can be considered as a large-scale change, managing the implementation is a major and crucial task (Umble et al., 2003; Carrillo and Gaimon, 2002). Prior implementation re-engineering of key business processes impacting organisational structures, policies, and employees is required (Schniederjans and Kim, 2003).
Hence, to accomplish successful IS use, an IS implementation should utilise a proper change management and be initiated and driven by business needs (Um- ble et al., 2003). IS and IS implementation, as related to industrialised timber frame housing, are further developed in Papers II, III, IV, and V.
3.4 Change
An organisational change is initiated by identifying a need of change (i.e. aware- ness) as related to external or internal driving factors (Mukherji and Mukherji, 1998). There are, of course, also hindering factors that resist change and can be identified during the matching between needs and objectives of the change, but which are possible to use as a supportive force, e.g. for successful adoption of change (Mabin et al., 2001). No general implementation model for a change exists – what is successful for some companies may not work for others; however, both factors of success (Linton, 2002) and hindrance (Mabin et al., 2001) have been identified. After awareness, matching, adoption, and implementation routinisation (i.e. incorporating the change as part of the organisation’s routines (Linton, 2002)) follow, Figure 3.3.
by Pettigrew (1987), and illustrated and described in Figure 3.4. The “what”,
“why”, and “how” of change can be represented by content, context, and proc- ess. By formulating the content of, for example, a new strategy, managing its ex- ternal and internal context and process is needed to complete the desired change, since the three terms are related (Pettigrew, 1987). Applying Pettigrew’s frame- work (1987) implies that the content of one change can be the context or process during another change. For example, manpower can be the area of transforma- tion during one change, the inner context as part of corporate culture or political context during the next change, and the process as an acting and interacting part among other interested parties during yet another change. Managing organisa- tional strategic change is complex, covering objective/analytical and subjec- tive/political aspects inside and outside the organisation (Whipp et al., 1989).
Figure 3.4. Three integrated components of change, modified after Pettigrew (1987).
For a manufacturing company, changes regarding manufacturing equipment, in- formation technology, and procedures (or combinations) are three main catego- ries for improved performance (Carrillo and Gaimon, 2002). Re-engineering is a method incorporating procedural changes and improved information manage- ment, e.g. through information systems, to improve performance through inte- gration, elimination of non-value added activities, and improved managerial de- cision-making (Carrillo and Gaimon, 2002). A change is complex, conducted in several phases, and consists of several components, i.e. different changes have different characteristics where phases and components have different levels of im- portance during different changes. A profit driven company acting in a competi- tive environment must be able to create a competitive advantage and make a profit to survive. Knowing how to manage change and change implementation is thus needed for sustainable competitiveness. Here, the term change is associated to changes of a strategic (or major) nature; however, its operational consequences are also of interest. Change and industrialised timber frame housing are further developed in Papers I, II, and V.
3.5 Implications
Sections 3.1-3.4 present the theoretical framework for the thesis. The framework in section 3 is somewhat similar to the theoretical frameworks provided in ap- pended papers and partly incorporates additional theory. The framework in sec-
